HR Growth Management
Introduction
Most companies face challenges that result from lack of proper HR strategies in the organization. For instance, the businesses have high employee turn over and difficulties in retaining employees. In addition, the organizations have diversity issues and problems in recruitment and selection of employees. The challenges have affected productivity in the organization. This is because most organizations have few employees and are unable to recruit skilled workers. In addition, the challenges have increased production costs in the organization. This is due to high cost of recruiting new employees. Most of the small businesses face the challenges above. This proposal is aimed at helping small businesses develop the right human resource strategies that are inline with the business objectives. This will help then organization overcome challenges resulting from poor HR strategies. For instance, it will help improve production in the organization by retaining employees. It will also help lower the recruitment costs in the organization. The proposal determines the importance of human resource practices on small businesses and how they can integrate human functions.
Discussion
Problem
Portland care homes limited is a company that offers care to people having learning disabilities and mental health problems. The firm has residential care homes where people having disabilities and mental problems are cared for. Like other small businesses, the organization does not have any specific post in the area of human resource and the structure is not good. The organization consists of various employees who have different responsibilities. For instance, the proprietor is the managing director and he makes decisions in the organization. The home manager is required to manage two homes. Most of the duties that are supposed to be performed by managers in the organization are carried out by human resource managers. For instance, the recruitment and selection of employees in the organization is carried out by HR. In addition, the HR is responsible for performance management and maintaining discipline in the organization. In addition, the HR is responsible for addressing various issues that are related to employment law. For instance, diversity and discrimination issues, protection issues etc. There are various changes that need to be made in the organization. For instance, the organization needs to change its services as a result of government policies. It also needs to provide enough training to the employees to be able to offer the new services. However, the organization is not able to offer training and address other HR problems due to lack of clear Human resource practices in the organization. Hence, the organization needs to integrate human resource functions in the organization by creating a HR post.
Literature review
This section will review research that has been carried out on Human resource management in small businesses. This will help determine the importance of HRM practices and how to implement the practices in the organization. For instance, Tim Mazzarol (2003) has carried out research to determine the effect of human resource management on the growth of small businesses. Tim (2003) argues that most of the small businesses like Portland Care Homes (Bushey) Ltd have experienced growth for the last two years and this has led to increase in number of employees in the organization. This has forced the organizations to implement human resource management policies to manage employees. Tim argues that the faster the small business firms are growing the more the businesses are likely to experience human resource problems. For instance, the business are likely to find it difficulty to retain high qualify staff. The owner managers find it hard to deal various human resource functions in the organization. This is because the managers do not have the right skills.
Poor management of various human resource functions like selection and recruitment, promotion of staff and retention can affect the organization negatively. In this case, managers are required to develop the right human resource policies so as to overcome the challenges. Developing successful human resource policies is important to the organization. A series of studies have shown that there is a positive connection between effective human resource in the organization and good business performance. This is evidenced in a study conducted by Rowden (1995).Rowden investigated use of formal human resource practices and informal human practices in three manufacturing firms that had 200 employees. The researcher argued that use of both formal human resource management practices and informal human resource management practices had a direct impact on the success of the organization. The researcher argued that as the number of workers increases, the organization needs to have a formal human resource manager (De Kok,Uhlaner &Thurik, 2006).
Companies that have less than 100 employees are able to operate well without having formal human resource managers. However, if the number exceeds 100, the firm should have a formal HR manager. The Portland Care Homes (Bushey) Ltd is growing faster and it has opened new branches locally. This has led to increase in the number of workers in the organization and complexity of human resource practices in the organization. This organization might not experience a rapid growth if it does not have a formal human resource manager and HRM practices. This is because of various reasons. First, the organization will find it hard to manage various human resource functions and employees. For instance, the organization will find it hard to recruit new employees and also retain employees. It will find it hard to delegate duties in the organization. This will in turn impact growth in the organization negatively. The company has faced various problems for the last two years. For instance, the organization has had problems due to poor management practices. The company was rated poor by CSCI in 2008 due to poor management. The organization is recovering from the effects caused by poor management. Though the company is recovering, there are new requirements that have been established for care homes to meet. The requirements are likely to affect the organization if it does not change its business strategies and human resource management practices. The creation of human resource functions in the organization will help the firm achieve competitive advantage in the industry. This is because the firm will be able to recruit the best employees and maintain the employees. It will also help improve services offered in the organization. This is because of skilled employees who are committed in achieving the organizational goals. Hence, the firm will be able to grow (Barret& Mayson, 2007).
Another problem in the organization is delegation of duties. The firm does not have a formal structure that shows delegation of duties. This is as a result of poor human resource management practices. Formal human resource management practices can help overcome issues resulting from delegation of duties. Tim (2003) argues that as companies grow, the managers find it hard to delegate duties in the firm and establish effective teams. In order to develop effective teams, the manager should identify the direction he or she wants the firm to move .After that the firm should encourage the employees in the organization to work towards achieving the goals set by offering training and development.
There has been minimal research on how small business owners use their management team skills and experience to achieve business objectives, growth and survival. This is according to Sue Marlow (2000). Sue (2000) argues that most of the small business owners do not notice the importance of their expertise and team skills and how they can use them as strategies to achieve objectives and enhance growth in the organization. Only big firms have managed to use their expertise and team skills to enhance growth in the organization. Sue focuses on strategic human resource management in small business. He claims that efficient use of labour in the organization can help firms achieve growth and also survive in the market. In his research, sue analyzes the debate on design school and emergent strategies and the functions of HRM in the organization. Small firms have contributed a lot in the creation of employment in the country as they employ a large percentage of the population. Though the small businesses have contributed a lot in the country, they remain prone to economic changes in the country. Most of the small businesses do not last for long. This is because the organizations do not have the right strategies to make then remain stable. Though most researchers have invested a lot in identifying the right strategies for small businesses to use so as to achieve the objectives set, the researchers have not been able to determine the right strategies. Sue (2000) argues that firms can use strategic human resource management to improve their competitive behaviours. He claims that labour contributes a lot to the performance of small business and should be given priority when developing strategic policies in the organization. The organizations should view labour as a resource that need to be developed, but not a cost that needs to be managed. This will make it easy for the organization to grow and attain the organizational goals. Since, labour is important in the organization, the use of labour in the organization should be approached in a strategic manner to ensure efficient use and establishment of human resource. The author carried out a study to determine how small busine4ss perceive strategic human resource management.
The researcher used a total of 64 firms. The researcher interviewed managers from the firm about the management policies used to manage employees and strategic objectives of the business. The results from the study showed that 90% of the managers believed that strategic human resource management should be integrated in the organization. This is because a strategic approach in the organization helps manage employees. Only 10% of the managers did not see the importance of strategic human resource management in the organization. Most of the firms that did not see strategic human resource management important argued that they had no plans to expand their business now or in future. Managers from the firms argued that strategic approach was best for firms that wanted to expand their businesses in future. They also argued that it was not necessary to help the firm survive if it was not aimed at expanding in future (Barret, Neeson &Bilington, 2007).
In addition, the research interviewed the participants on the effect of employee management on competitive advamtage.85% of the participants argued that employee management had effect on competitive advantage. Firms that had good employee management policies were able to manage their employees well unlike those which did not have (Woodsham &Lupton, 2006). The participants argued that small firms should have an HRM manager who is responsible for delegating duties to line managers. Out of the 64 firms used in the study, only 15.6% had an HRM manager in post. When asked who managed employees in the organization, the managers argued that the management team in the organization shared the duties (French, Kelly &Harrison, 2004). Each of the line managers in the organization was supposed to manage his or her employees. This is because the managers were more able to know their employees and problems they faced and were in a better position to solve them. The managers performed other HR roles like recruiting new employees. The employees were recruited according to the experience they had. The findings from the study showed that most of the small firms do not offer training to their employees as it is expensive. This in turn affected their growth and competitive advantage. Sue (2000) noted that small firms can use strategic human resource management to improve their growth as it enables the firms to manage their employees well. He argues that though most managers realize the benefits associated with strategic human resource management, they find it hard to integrate strategic human resource management in the organization as they lack skills and guidance (Sels, Winnie,& Maes, 2006).
Like Sue (2000), Rowena Barrett and Susan Mayson (2007)carried out a research to determine the importance of human resource management in small firms that were expanding. The researchers were aimed at determining the relationship between HRM and small businesses. The researchers used a total of 600 small business firms in Australia. The findings from the study were similar to the findings firm the study carried out by Sue(2000).The findings showed that small businesses which were growing were more likely to use formal human resource practices than firms which were not growing. Most researchers argue that strategic human resource management helps in understanding the functions of human resource management in small businesses. This is because strategic human resource management helps organizations become competitive in the environment by aligning their human resource management policies and practices with business activities (Wyer &Mason, 1998). For instance, the firms are able to align their recruitment and selection activities with business objective. They are also able to align training and development with business strategies established. Hence, the studies show that human resource management can be a source of competitive advantage for the business. A series of studies have shown that HRM policies and practices are necessary in small businesses that are expected to grow.
This is because the human resource management policies help the business handle problems resulting from increase in number of employees and hence, growth. In addition, the small businesses find it hard to recruit and select new employees because of poor human resource practices. This is evidenced by various authors like McEvoy’s (1984).The author carried out a study using 84 small firms that had almost 75 employees. The findings from the study showed that the firms found it hard to identify the nest employees during selection. This is because the recruitment practices that were used in the organization were not formal. In addition, the selection techniques that were used in the firm were also not effective. The businesses used face to face interviews. Like other small business, the Portland Care Homes (Bushey) Ltd faces numerous challenges that result from poor selection practices and recruitment practices. The recruitment practices and selection practices used in the organization are not formal. The organization needs to adapt formal human resource practices so as to be able to experience growth and achieve competitive advantage (Harney &Dundon, 2007).
Though the studies above have shown how human resource management is beneficial to an organization, most forms find it hard to align the human functions with the business strategy. There are various ways that firms can use to integrate human resource functions in the organization. Developing human resource capabilities in the organization is not east. It requires the enough training and development of human resource specialists and other line managers in the organization. The line managers and human resource practices should be trained on how to manage employees in the organization. The firm is required to invest well so as to be able to integrate human resource functions in the organization effectively. In addition, for the human resource function to be effective it must establish the operational capacity and strategic human resource capabilities.
The organization should develop policies and practices that promote integration of human resource functions. This is according to Stephen Bach (2001).Bach argues that there has been minimal research on the human resource functions in health care. Most of the researchers have concentrated on the private sector. Stephen Bach (2001) claims that poor human resource practices hinder reforms in the health care sector. For instance, the poor human resource practices have led to shortage of workers in the health care industry. This is because most of the organizations are not able to manage their employees and hence have slow growth. It has also led to poor utilization of employees in the organizations. Firms that have enough employees find it hard to utilize their employees due to lack of proper skills in the organization (Mazzarol, 2003).
The human resource management practices have affected the health care sector negatively. For instance, they have led to health services being ranked low. Most organizations have realized the benefits human resource management have like improving the performance of the organization. This is because most firms have recognized human resource as the best resource in the organization. There are different HR practices models that are based on the resource view. The models help organizations translate strategic human resource approach to effective human resource policies. First, the universal model helps firms achieve competitive advantage regardless of their firms. The contingency model helps connect human resource management policies that are embraced in the firm with the business environment. An effective human resource strategy should focus on various things. For instance, it should focus on ownership. It should view people as resources that need to be developed regularly. The organization top managers should support development of human resource by ensuring proper management. The strategy should fit into the external environment. In this case, the organization should plan its human resource requirements well so as to incorporate changes in the external environment.
The Portland Care Homes (Bushey) Ltd should invest on training and development of human resource specialists and line managers so as to help integrate human resource functions in the organization well. In addition, the organization should develop policies that promote integration of human resource functions and business strategy. The business strategy in the organization is important. This is because it helps in identification of human resource needs and management practices that are good for the organization. This is according to peter Wyer and Jane Mason (1998).The kind of business strategy in the organization determines how the human resource functions will be integrated. Organizations that have good business strategy are able to align the human resource functions with business strategy. The Portland Care Homes (Bushey) Ltd does not have a good business strategy and this has affected its performance as it makes it hard to determine human resource needs. It has also affected the management in the organization. Improving the business strategy in the organization will help integrate human resource functions effectively. For instance, it will enable the creation of a human generalist post in the organization. Hence, adopting formal human resource practices and policies in the organization will help improver the firm’s growth and overcome HR problems in the organization (Mazzarol, 2003).
Methodology
Research questions
The researcher will use a wide range of research questions. The research questions are based on the literature review. For instance, the researcher will determine the effect of human resource management practices on the performance of the organization. In addition, the researcher will determine if the human resource management practices help firms achieve competitive advantage or not. Moreover, the researcher will also examine how human resource management practices help an organization grow. In addition, the researcher will determine how the organizations vision, mission and capabilities affect integration of human resource functions in the organization. Also, the researcher will determine how the firms’ structure and design affects the implementation of human resource functions in the organization.
The questions are as follows;
What is the impact of human resource management practices on firm’s performance?
What is the effect of human resource management practices on firm’s competitive advantage?
What is the impact of human resource management on the firms’ growth?
What is the effect of organizational vision, mission and capabilities on implementation of human resource function in the organization?
What is the effect of the organizational structure and design on the implementation of human resource functions? (Boxall, 2003).
Research design
The study will use quantitative research method. The quantitative research method will allow the researcher to use a large sample size in his study. This will make it easy fir the researcher to get valid results. Apart from allowing the researcher to use a large sample size, the quantitative research method has other advantages. The quantitative research method makes it easy for the researcher to generalize the findings from the study to the whole population. This happens if the response rate is high. Quantitative research method allows the user to use statistical techniques to analyze the data and this makes it easy for the researcher to analyze the data collected. In this case, the researcher will be able to generalize the findings from the study (Boxall, 2003).
On the other hand, the quantitative research method has various disadvantages. First, it takes a lot of time to collect data and analyze it. This is because the sample size used in the study is large. The researcher will use questionnaires to collect data for the study. The researcher will use structured questioners that have a series of questions to collect data from the participants (Sanz-Valle, Sabater-Sanchez’& Aragon-S’anchez´, 1999).
Sample size
The researcher will use almost 150 firms in the study. The sample size will be selected randomly and it will include both small firms and big firms in different industries. The research will use random method to select the firms to ensure the validity of the data is not affected. The random method will ensure the results of the study are not biased (Boxall, 2003).
Research procedure
The first step in carrying out the research is getting permission from the firms’ managers’ .In this case, the researcher will be required to seek permission from the respective firms before commencing the study. In addition, the researcher will be required to inform the participants what the research will be about. The researcher is not supposed to carry out the research without the consent of the participants. This will help eliminate ethical issues that result from lack of participants consent. After that the researcher will collect data from the participants using questionnaires that have the questions above. The participants’ will be required to answer the questions appropriately. The researcher can also use interviews. In this case, the researcher will interview the participants according to the questions stated above. After collecting the data required, the researcher will analyze it using statistical methods (Sanz-Valle, Sabater-Sanchez’& Aragon-S’anchez´, 1999).
Data analysis
This section analysis the data collected will be analyzed using statistical methods like graphs, charts. In this case, the researcher will be able to compare the independent variables and dependent variables. Statistical methods are effective in analysis data and they offer valid results. After analyzing the data using statistical methods, the researcher will make the necessary conclusion. For instance, the findings from the research show that human resource practices improve the competitive advantage in the organization and growth. Also, the findings from the study show that an organization should have the right vision and mission so as to be able to implement HR functions. It should also have the right structures and design to implement HR functions(Sanz-Valle, Sabater-Sanchez’& Aragon-S’anchez´, 1999).
Conclusion
In conclusion, the findings from the study show that formal human resource practices have a lot of benefits to the organization. First, formal human resource management helps in enhancing growth in small businesses. This is because the organizations hire the right kind of employees who are able to help the organization achieve good growth. In addition, human resource management practices help organizations achieve competitive advantage. In this case, the organization hires competent employees and is able to maintain their employees, hence competitive advantages. Moreover, human resource management helps in improving the performance of the organization. Organizations that good human resource management practices are able to perform well unlike organizations that do not have good human resource management. This is because the organizations have few problems that result from informal and poor human resource management practices. This is evidenced in the studies above. There is minimal study on the effect of human resource management on small businesses. Some of the researchers who have carried out study to determine the impact of human resource management on the organization have noticed the advantages of having human resource management practices in small business.
The Portland Care Homes (Bushey) Ltd should implement formal human resource management practices to help overcome various issues that the firm is facing. The company is not able to compete well with other firms in the market due to poor management and lack of formal human resource management practices. In addition, the form has been ranked poor as it does not offer quality services. Implementing human resource functions in the organization will help improve the services offered by the firm. This is because the firm will be able to employ employees who are qualified and also be able to meet the human resource needs. This will in turn lead to quality services. So, I recommend the Portland Care Homes (Bushey) Ltd to implement formal human resource practices in the organization so as to be able to grow and achieve competitive advantage. The findings from the study might not be valid because of the lack of biasness and effects from the instruments and methods used in the study.
Reference
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Boxall,P.(2003). HR strategy and competitive advantage in the service sector. Human Resource Management Journal, Vol 13, Issue No 3, pages 5-20
Barret,R.,Mayson,S.(2007).Human resource management in growing small firms .Journal of small business and enterprise Development,vol 14, issue no2, page 307-320
Bach,S .(2000). HR and new approaches to public sector management. Improving hrm capacity
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French,S.J.,Kelly,S.J.,&Harrison,J.F.(2004).The role of strategic planning in the performance of small, perofesional service firms. Journal of development management, vol 23, Issue no 8, page 765-776
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Sels,L.,Winnie,S.,Maes,J.(2006).Unravelling the HRM–Performance Link. Value-Creating and Cost-Increasing Effects of Small Business HRM. Journal of management studies, vol 43, issue No.2.
Sanz-Valle, R., Sabater-Sanchez´,R.,& Aragon-S’anchez´, A .(1999). Human resource management and business strategy links. An empirical study .The International Journal of Human Resource Management Vol 10, issue No 4 , page 655-671
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Wyer,P.,&Mason,J.(1998).An organisational learning perspective to enhancing understanding of people management in small businesses. . Internal journal of entrepreneurial behaviour and research, Vol 4, issue no2, page 112-128
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